The facts
- Date
- November 21, 2015
- Where
- Carey Business School, Baltimore
- Organisers
- Innovation Factory and the Club
- Teams
- 8 student teams of 5
- Startups
- 6 pitched; 5 founded by Hopkins alumni and students
- Judges
- 7, playing the partners
- Winner
- Charm City Capital
- Next step
- Regional Finals, January 29, 2016, Georgetown University
How it unfolded
1. The pitches
In the morning the founders of six startups pitched to the teams and the judges. The teams had received the pitch decks and financial information beforehand, so the session was a chance to hear directly from the founders. The JHU-affiliated startups were Barkly, Edessa, Visable, Supercook and PathoVax; the sixth was Farm Table.
2. Due diligence
The teams then went deep into each company’s business plan, to understand its fundamentals, its growth opportunities, and the motivations and capabilities of the founding team to execute.
3. Term sheet and thesis
Each team chose the startup it wished to back and prepared a term sheet setting out its investment thesis and deal structure.
4. Partners meeting
Teams pitched their thesis and diligence findings to the partners, played by the judges. The debate covered the pros and cons of the company, the investment risks and how to reduce them, the right deal structure and types of securities (the mix of debt and equity), valuation and potential exits.
5. Final negotiations
Two teams, Charm City Capital and Impetus, negotiated with their chosen startup in front of all participants. Charm City Capital closed a deal with Barkly; Impetus closed a deal with Supercook.
What to take from it
- A venture deal is a sequence: pitch, diligence, thesis, term sheet, negotiation. Each stage narrows the choice.
- Diligence is as much about the founding team’s motivation and capability as about the numbers.
- A term sheet is where thesis becomes structure: securities, valuation and the path to an exit.
- Teams were judged on attention to detail in diligence, preparedness, understanding of the venture capital process, individual abilities and teamwork, and the ability to defend the thesis.
Try it yourself
Pick one of the six startups, name one reason to back it and one risk, and say what you would change in a term sheet to reduce that risk.
Source and terms
Built from the Club’s recap: Johns Hopkins Venture Capital Investment Competition 2015: Become a Venture Capitalist!. The recap also reports that in 2014 the Johns Hopkins team entered the Mid-Atlantic regional final and won The Entrepreneur’s Choice award, and that VCIC is described as the world’s largest venture capital competition among graduate students from more than 70 business schools. Figures are as reported in the recap.
Terms used: Term sheet · Due diligence · Valuation · Exit